German VAT rates and VAT compliance

Germany broadly follows European Union (EU) rules on VAT compliance. However, Germany is free to set its own standard VAT rate, provided it’s above 15%.

The standard VAT rate in Germany is 19%. This applies to most goods and services in the country. There’s also a reduced rate of 7% that applies to certain foodstuffs, cultural services, and medical and dental services.

VAT-registered businesses operating in Germany making taxable supplies of goods or services must charge the appropriate VAT rate and collect the tax for onward payment to the German tax authorities through VAT filings.

See below for more details on German VAT rates:

Domestic businesses in Germany must register for VAT if they exceed the threshold of €25,000 per annum. For foreign businesses, the threshold is nil. EU businesses selling goods or services over the internet to customers in Germany have a VAT registration threshold of €100,000 per annum. Get more details on trading situations that would require registering for VAT in Germany, and the process businesses must follow.

Domestic and foreign businesses making taxable supplies of goods or services in Germany must register for VAT and report taxable transactions via periodic filings. Businesses with an annual VAT liability exceeding €7,500 must file VAT returns monthly, while those with a VAT liability of €1,000-7,500 must file quarterly. Get more details on VAT returns in Germany.

Germany does not generally require a fiscal representative for EU or non-EU businesses. However, there may be a small number of circumstances where the German authorities request that non-EU businesses must appoint a German tax representative or local contact, such as for complex import and export or customs situations.

If domestic or foreign businesses move goods across the German border to or from other EU countries, they may be required to comply with monthly Intrastat reporting. These filings list the goods a business has sent out of Germany (dispatches), as well as goods brought into Germany (arrivals).

Intrastat filings need to be completed if the reporting thresholds are exceeded. The threshold for German Intrastat dispatches is €1 million. The threshold for German Intrastat arrivals is €3 million.

Filings should include the trade classification, value, quantity, weight, commodity code, and country of arrival or dispatch.

Intrastat does not apply if goods are arriving from outside Europe (imports) or being sent out of the EU (exports).

Businesses registered for VAT in Germany that are selling goods and services to other VAT-registered businesses in the European Union (EU) — completing an intra-community supply — may be required to file an EC Sales List (ESL).

ESLs — also known as recapitulative statements — are filed monthly for goods once sales go over €100,000 per annum. Otherwise, it is quarterly filings for goods. For services, the returns are filed quarterly. The filing date is the 25th of the month following the reporting period (monthly/quarterly) end.

ESLs are filed in addition to the regular German VAT return or German Intrastat. German ESL filings are made online. There may be a fine of up to €5,000 for late or incorrect German ESL filings.

The tax point, or time of supply rules, in Germany determines when the VAT is due. VAT is then payable to the tax authorities 10 days after the VAT reporting period end (monthly or quarterly). For most goods, it’s the time of delivery or passage of title. For services, it’s the completion of the service.

Non-resident businesses holding stock in Germany without a permanent establishment (such as offices and staff) may be required to register for VAT in Germany in order to report the intra-community movements of goods into Germany and subsequent sales to local customers.

German call-off stock

Where goods are held under the full control of a single German customer (although legal title has not fully passed till the goods are retrieved) there is a simplification exception to remove the requirement to VAT register the non-resident business in Germany. Instead, the seller treats the movement of the goods to Germany as a zero-rated sale immediately.

German consignment stock

Where goods are held in a warehouse for multiple customers, and remain under the control of the non-resident business, the non-resident business must register for VAT in Germany in order to report the movement and sales of goods. If the goods are coming from outside the EU, they are a VAT import (as opposed to an intra-community supply), and VAT registration may be required on this basis alone.

Non-resident businesses operating in Germany may incur German VAT, which they will not be able to recover through their own local VAT or tax returns. Businesses established in another EU country can submit German VAT recovery applications through the EU VAT Refund Portal. This is then processed and submitted to the relevant German authority, which must refund the VAT directly to the business.

Non-EU businesses can use the 13th VAT directive refund procedure for VAT recovery in Germany. If a tax reciprocity agreement is in place between Germany and their home territory, the business can complete and submit a special German form to the tax authorities. This should generally be accompanied by supporting original invoices, plus a local tax certificate.

German VAT reclaims must be submitted by 30 June of the year following the year in which the invoice was raised.

Under EU single market rules, foreign businesses can reclaim VAT on the same basis as German businesses — but only if they do not carry out taxable supplies that would require registration in Germany.